In the Matter of Jane Tiffany Living Trust
| Decision Date | 06 March 2008 |
| Docket Number | No. 46983.,No. 45874.,No. 45248.,45248.,45874.,46983. |
| Citation | 177 P.3d 1060 |
| Parties | In the Matter of the JANE TIFFANY LIVING TRUST 2001, U/A/D NOVEMBER 5,, 2001. William Ricks, Individually, Appellant, v. Phillip J. Dabney, Trustee of the Trust of Jane Tiffany, Respondent. In the Matter of the Jane Tiffany Living Trust 2001, u/a/d November 5, 2001. William Ricks, Individually, Appellant, v. Phillip J. Dabney, Trustee of the Trust of Jane Tiffany, Respondent. Josephine Ricks, Appellant, v. Jane Tiffany Living Trust 2001, a/k/a Peninnah J. Tiffany Living Trust, and Phillip J. Dabney, Trustee of the Peninnah J. Tiffany Living Trust, Respondents. |
| Court | Nevada Supreme Court |
Kenneth G. Frizzell III, Las Vegas, for Appellants.
Goldsmith & Guymon, P.C., and Dara J. Goldsmith, Las Vegas, for Respondents.
BEFORE HARDESTY, PARRAGUIRRE and DOUGLAS, JJ.
In these consolidated appeals, we consider whether an attorney, whose law firm partner prepares an estate plan for a client who names the attorney as a beneficiary, has overcome the presumption of undue influence. We further consider whether violations of the Nevada Rules of Professional Conduct afford a private right of action. Finally, we address whether the district court erred in dismissing a civil action for constructive trust that was initiated after trust proceedings had already taken place.
In considering whether the attorney in this case has overcome the presumption of undue influence, we determine that such a showing must be made by clear and convincing evidence, and we conclude that clear and convincing evidence demonstrates that the client in this case was not unduly influenced in naming the attorney as the primary beneficiary of her estate. Further, we reiterate our holding in Mainor v. Nault that violations of Nevada's professional conduct rules do not give rise to a private right of action.1 Lastly, we conclude that the district court did not err in dismissing the civil action for constructive trust that was instituted after the trust proceedings had already taken place.
These consolidated appeals concern the estate of Jane Tiffany. Before her death, to avoid probate, Jane established a living trust within which she could place all of her assets. But before arranging her living trust, Jane quitclaimed her house to her nephew's wife, appellant Josephine Ricks, and to herself as joint tenants with rights of survivorship.
Eventually, Jane had her estate plan prepared by Kenneth A. Woloson, a law firm partner of Jane's friend, respondent attorney Phillip J. Dabney. While her estate plan was being prepared, Jane asked Josephine to quitclaim her interest in the house to Jane's living trust. Josephine agreed because Jane had allegedly promised her that she would receive the house upon Jane's death; as a result, Josephine quitclaimed her interest in the house to the living trust.
In executing her living trust, Jane listed Dabney as the beneficiary of her house. Josephine's husband, appellant William Ricks, attempted to overturn Dabney's designation as a beneficiary of the estate in a trust proceeding after Jane's death. William argued that Dabney's designation was a product of undue influence, as Dabney's law partner had prepared Jane's estate plan. The district court ultimately determined that Dabney rebutted the presumption that he unduly influenced Jane into naming him as a beneficiary of Jane's estate. Thereafter, based on Dabney's motion for attorney fees and costs, the district court awarded $51,635.35 to Dabney.
Subsequently, Josephine instituted an action seeking relief in the form of a constructive trust in her favor, consisting of Jane's house.2 Dabney moved to have the district court consolidate Josephine's action with the trust proceeding, which already was on appeal, and to dismiss Josephine's action. At the hearing on Dabney's motions for consolidation and dismissal, in addition to considering Dabney's motions, the district court made determinations with respect to two documents that Josephine had filed: (1) the district court struck Josephine's amended complaint filed that day, based on her failure to request leave to file it; and (2) the district court denied Josephine's pending motion for summary judgment. The district court also granted Dabney's motions, consolidating Josephine's action with the trust proceeding and dismissing her action. The district court's dismissal was based on Josephine's failure to file a creditor's claim during the trust proceeding; the district court further concluded that because Josephine had previously filed a notice of lis pendens during the trust proceeding, she had already "had her day in court." These consolidated appeals followed.
In these consolidated appeals, we address and consider whether Dabney rebutted the presumption of undue influence that arose when his law firm partner, Woloson, prepared Jane's living trust naming Dabney as the beneficiary of Jane's house, whether a violation of SCR 1583 provided a private right of action for setting aside Jane's living trust, and whether the district court erred when it dismissed Josephine's constructive trust action.
Undue influence
William argues that the evidence does not support the district court's conclusion that Dabney rebutted the presumption of undue influence that arose when Woloson prepared Jane's living trust naming Dabney as the beneficiary for Jane's house. We disagree.
A presumption of undue influence arises when a fiduciary relationship exists and the fiduciary benefits from the questioned transaction.4 A fiduciary relationship between Dabney and Jane existed in this case because Dabney's law firm partner, Woloson, had prepared Jane's living trust, which benefited Dabney in that he was the beneficiary of Jane's house.5 Thus, when Dabney substantially benefited from Jane's estate plan, a presumption of undue influence arose.
We have previously noted, in the context of an attorney obtaining a business advantage from a client, that a presumption of impropriety may be overcome only by clear and satisfactory, evidence.6 As it appears that this court has never precisely defined "clear and satisfactory" evidence, we clarify that "clear and satisfactory" evidence is equivalent to "clear and convincing"7 evidence. Indeed, in In re Drakulich, we recognized that clear and convincing evidence must produce "satisfactory" proof that is
so strong and cogent as to satisfy the mind and conscience of a common man, and so to convince him that he would venture to act upon that conviction in matters of the highest concern and importance to his own interest. It need not possess such a degree of force as to be irresistible, but there must be evidence of tangible facts from which a legitimate inference ... may be drawn.8
Thus, regardless of the terminology used— whether "clear and satisfactory" or "clear and convincing"—as the Tennessee Court of Appeals has noted, "the evidence must eliminate any serious or substantial doubt about the correctness of the conclusions to be drawn from the evidence."9
Only this heightened standard can overcome the presumption of undue influence10 because quinder our case law, when an attorney deals with a client for the former's benefit, the attorney must demonstrate by a higher standard of clear and satisfactory evidence that the transaction was fundamentally fair and free of professional overreaching."11 This higher standard ensures that the law will protect those who cannot protect themselves.12
Having reviewed the record, we conclude that the district court properly found that Dabney had rebutted the presumption of undue influence with clear and convincing evidence. The evidence contained within the record establishes that Woloson prepared Jane's living trust in accordance to her instructions and desires and that Jane's wishes were not a product of Dabney's undue influence.13 Accordingly, we conclude that the evidence supports the district court's finding of no undue influence.
William argues that because Dabney and Woloson violated SCR 158, the district court should have set aside Jane's living trust. This argument is unpersuasive.
Before being repealed, SCR 158(3) provided in pertinent part that "[a] lawyer shall not prepare an instrument giving the lawyer or a person related to the lawyer as parent, child, sibling, or spouse any substantial gift from a client, including a testamentary gift, except where the client is related to the donee." Further, before being repealed, SCR 160(1) provided in pertinent part that "[w]hile lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 157, 158(3), 159 or 168."14
Even though SCR 158 and 160 apparently were violated when Woloson prepared Jane's living trust benefiting Dabney, these per se violations did not afford William a private right of action to set aside Jane's living trust.15 In Mainor, we held that an attorney's violation of the professional conduct rules does not create a private right of action for civil damages, but that a violation is relevant to the standard of care owed by an attorney.16 Accordingly, we conclude that the district court did not abuse its discretion in refusing to set aside Jane's living trust despite the apparent violations of SCR 158 and 160. In reaching this decision, we reiterate that any violation of the Nevada Rules of Professional Conduct does not create a private right of action.17
Dismissal of Josephine's civil action
Josephine argues that the district court erred in dismissing her civil action for constructive trust. We conclude that the district court did not err in dismissing Josephine's civil action.
In dismissing Josephine's civil action, the district court determined that Josephine was time-barred from bringing her claim be cause she did not file a...
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Caraveo v. Perez (In re Estate of Bethurem)
...when a fiduciary relationship exists and the fiduciary benefits from the questioned transaction.” In re Jane Tiffany Living Trust 2001, 124 Nev. 74, 78, 177 P.3d 1060, 1062 (2008) (addressing undue influence in the context of an attorney receiving an inter vivos transfer from a client). Onc......
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Blanchard v. Montgomery (In re Estate of Blanchard)
...the questioned transaction." In re Estate of Bethurem, 129 Nev. ___, ___, 313 P.3d 237, 241 (quoting In re Jane Tiffany Living Trust 2001, 124 Nev. 74, 78, 177 P.3d 1060, 1062 (2008)). "A fiduciary relationship [ ] arises from the existence of the marriage itself, thus precipitating a duty ......